Bk question

Bk question

Hello,

First off great site. I have been reading this site everynight for the past week or so. I currently have about 25k in cc debt, with my income slightly down (roughly 35k). Things are getting extremely tight, pretty much to the point where I have to select which bills I want to pay and which ones I don't. As of today, I have never paid a bill late in my life and I believe that is what is keeping my credit score avg bc my DTI is so high. My credit scores are around 647. My question is if I do file chap 7, should I cont. to pay on those bills that I want discharged so they are not late? Or will it not matter? Second question I have is how big of a impact can I expect when/if I file? 100 points? more or less?

Re: Bk question

As it is always stated, speak with a BK attorney first and foremost because the rules vary from state-to-state. Now that I have gotten that out of the way, you would be best served to stop paying if you are truly going to file. The attorney will probably advise you to do the same because you don't want to seem as if you are showing favoritism to one creditor over another. Plus, you can use the money to pay for the attorney because in CH7 you have to pay upfront. The attorney cannot be another creditor that you still owe money to.

Your open accounts will have to be listed as creditors when you file and most likely the creditors will close your account. We had a Macy's card that we had not used in years with a $0 Balance but Macy's is reporting IIB. Your lates will not show as long as the account is showing as IIB. That is why once you file you need to start going to work in repairing your credit. Your score will probably take hit, only because you do not have any late payments but you will be able to overcome the initial hit in less than 2 years. Most people who file have late payments and actually see a score increase once they file.

Re: Bk question

Okay thanks for the information! One last question... I work for a bank and have a CC through them. I was hoping not the file on them because they are my employer and just pay that card off over the next 6 months. My question is what are the chances of them closing that card if I do not write off that debt? Or should I just swipe the whole slate clean?

Re: Bk question

Justin93 wrote:

Okay thanks for the information! One last question... I work for a bank and have a CC through them. I was hoping not the file on them because they are my employer and just pay that card off over the next 6 months. My question is what are the chances of them closing that card if I do not write off that debt? Or should I just swipe the whole slate clean?

Thanks,

Justin

When filing you MUST list all of your creditors. Then you can choose which accounts you want to reaffirm. If your employer lets you reaffirm is up to them. Paying your employer's cc instead of the all the other cc's is favoritism and is frowned upon...some creditors have been required to return all monies received within 90 days (not exactly sure of the time frame) of the bk filing. So you can't play one creditor against another by purposely choosing which creditor you favor to pay over another.

As someone has already stated, if your intent is to truly file, then it makes no sense to pay another dime to any creditor. It sounds like to me though, whether you make that decision now or much later, the end result will be that you will have to file. I do not encourage anyone to file, as I have been through a bk myself, but if you're just prolonging the inevitable then it is best to cross the line now instead of later.

Many people, including myself had fought that same feeling you are having right now, but afterwards are wondering what the heck took so long to actually make the move. For me, one of THE hardest steps was to admit that I was in over my head, and no matter what arrangements I made with my creditors, that there was no way on God's green earth that I would be out of debt in the next 10 years. I couldn't vision myself living so stressed out, penny pinching, not being able to eat anything other than rice and beans, no vacations, and no money to pay one cent more than what I was already paying. Couldn't live with that so I made the decision that this was my only way out. That was 6 years ago because I filed a chp 13 that took 5 years to complete.

All was not bad during those years....I experienced both highs and lows, but I made it through it and I'm just fine. So I wish you luck in whatever decision you make.

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.